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CDU and SPD launch coalition negotiations

Germany's two largest parties, the CDU and the SPD, have begun coalition talks. Party leaders have shown a readiness for compromise, but not without putting their own parties' stamp on the final outcome.

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Coalition talks start in Berlin

Coalition talks start in Berlin

A delegation from the opposition Social Democrats (SPD) is meeting with Chancellor Angela Merkel's Christian Democrats (CDU) and their Bavarian sister party, the Christian Social Union (CSU), in Berlin on Wednesday. The first session at CDU headquarters, kicks off a series of meetings aimed at forming a coalition government of Germany's two largest parties – known as a grand coalition.

Topics ranging from business, to education, to agriculture have been divided among 12 working groups, with four additional subgroups overseeing discussions on special topics, such as integration and migration. Deliberations are expected to last through the end of November, possibly extending to Christmas in the case of an impasse.

Financing worries SPD

Following exploratory talks last week, leaders from both sides expressed confidence that the center-right and center-left parties could work together. However, in the lead up to Wednesday's talks, it became clear that neither party intended to compromise on the issue of taxes.

The SPD would not enter into negotiations "half-heartedly," SPD Secretary General Andrea Nahles told the daily Rhein-Zeitung. She added that the SPD would not accept vague agreements from the CDU/CSU.

"Everything we agree to must be able to be financed in a reliable, sound and fair way. We will insist on it," Nahles said.

The opposition party has released a list of 10 "indispensable" points which it wants in the formal agreement. Their demands include introducing a minimum wage of 8.5 euros ($11.51), battling poverty among the elderly, gender equality in the workplace and allowing citizens to have dual citizenship. Without a plan on how to finance the compromises, no compromise on any of these issues mattered, Nahles said.

"It's unclear to us how [these plans could work] without raising taxes," she added

'No new taxes in 2015'

The CDU/CSU had already rejected raising taxes despite a budget surplus of 8.5 billion euros ($11.3 billion) during the first six months of 2013, resulting from a strong rise in tax revenues.

"[We've already said] no new debt in 2015," CDU Secretary General Hermann Gröhe said at a meeting CDU leaders earlier this week, referring to the CDU/CSU's campaign promise.

Financing other projects "will be more dependent on the bigger picture, economic development and other things," Gröhe said.

Merkel's CDU/CSU bloc won a resounding victory in the September 22 federal elections, falling just five seats short of an absolute majority. Its junior coalition partner, the liberal Free Democrats (FDP), did not make the five-percent threshold needed to secure seats in parliament, forcing Merkel to find a new coalition partner.

The SPD has reiterated concerns over entering into another grand coalition with Merkel because of the party's experiences in the grand coalition between 2005 and 2009. The partnership is believe to have resulted in the SPD's worst-ever election results in the election that followed.